A New Study Dives Deep into Race and Economic Mobility in America

By Ben Wilterdink                                                                                                                                                        April 5, 2018

This article originally appeared in Medium.                                                                                                                     

 

A recently released study on race and economic mobility has been making waves as it both sheds new light on an important aspect of recent trends in economic mobility in America and spurs some uncomfortable conversations. The study, “Race and Economic Opportunity in the United States: An Intergenerational Perspective,” published by the Equality of Opportunity Project, was produced by Stanford Economist Raj Chetty, Harvard Economist Nathaniel Hendren, and U.S. Census Bureau researchers Maggie R. Jones and Sonja R. Porter. The highly detailed and comprehensive study uses an incredibly large data set that includes almost everyone in the U.S. that is now in their late 30s—using IRS data to track individuals’ incomes over time and compare them to their parents’ household incomes. The study’s most significant finding is the difference in rates of upward economic mobility between white and black men of similar backgrounds, with black men consistently less upwardly mobile than their white peers.

The striking gap in the rates of upward economic mobility between whites and blacks was overwhelmingly driven by differences among men, with little difference in income mobility between white and black women of similar backgrounds. White boys who were born into wealthy households were also likely to be wealthy in adulthood, with 39 percent remaining in the top income quintile as adults. Black boys born into wealthy households, however, were much more likely to become poor in adulthood, with just 17 percent remaining in the top income quintile as adults. Similarly, white men who grew up in poverty were much more likely to escape it as adults, with just 31 percent remaining poor in adulthood. Of black boys who grew up poor, in contrast, 48 percent would remain poor in adulthood. The Upshot blog at The New York Times published interesting visuals that neatly illustrate some of the report’s findings.

It is worth noting that the study measures relative economic mobility rather than absolute economic mobility. Instead of comparing the real income of children as adults to their parents’ income at the same age (absolute mobility), the authors compared the parents’ household income rank to the child’s individual income rank as an adult (relative mobility). This distinction is important to keep in mind, especially since recent research on trends in economic mobility in America more broadly concluded that close to three out of every four children grow up to earn more than their parents did at the same age. This includes the vast majority of poor children as well. A 2012 Pew report found that 93 percent of children whose parents were in the bottom fifth of the income ladder exceeded their parents’ family income as adults.

Although the conspicuous gap between the rates of upward economic mobility of white boys and black boys was certainly the most compelling takeaway of the recent study from Chetty et al., the authors included some significant findings for other racial cohorts as well. The authors concluded that, even though present income levels may be lower than whites, Hispanics have rates of economic mobility similar to those of whites and are on a trajectory to catch up to their white peers across generations. The authors also found that Asians had the highest rates of relative upward economic mobility of any group and were likely to experience similar levels of economic mobility as whites going forward. But like black children, American Indian children also faced much lower levels of upward economic mobility and higher levels of downward economic mobility than white children.

In addition to these findings, the study probed into some of the potential sources of these racial gaps in economic mobility. One discouraging finding was that the mobility gap between white and black boys was unlikely to change based on family structure, neighborhood, or childhood household income level. At one point, these observations even led the authors to conclude, “black-white intergenerational gaps in boys’ outcomes are not explained by the family-level factors most commonly discussed in prior work.” Despite their conclusion, however, Institute for Family Studies Senior Fellow and Director of the National Marriage Project at the University of Virginia W. Bradford Wilcox raises some serious critiques of that conclusion. The critiques offered by Wilcox should be read in full, but one of his primary points is the fact that an increased presence of black fathers within a neighborhood appears to play a significant role in higher rates of upward economic mobility for black boys.

In fact, when examining various factors that might influence the mobility gap, the authors concede, “the fraction of low-income black fathers present is most predictive of smaller intergenerational gaps.” They also conclude that there is a positive association between black father presence and higher incomes for black men. This association persisted even when there wasn’t necessarily a black father within a particular family; what mattered was the presence of black fathers within a neighborhood. In addition to the importance of black fathers, the authors concluded that black boys did particularly well in areas that also have low levels of racial bias among whites and where poverty is low. Sadly, only a very small number of black boys grow up in such neighborhoods.

It is noteworthy that there is at least some reason to be skeptical of the authors’ measurement of racial bias among whites. While the measurement is based in part on the Racial Animus Index (which is primarily concerned with the frequency of Google searches for racial epithets in a specific area), the authors also rely on measurements of implicit racial bias as measured by implicit association tests (IAT). In a comprehensive discussion of the many problems with the IAT, New York Magazine’s Jesse Singal makes the point clearly:

A pile of scholarly work, some of it published in top psychology journals and most of it ignored by the media, suggests that the IAT falls far short of the quality-control standards normally expected of psychological instruments. The IAT, this research suggests, is a noisy, unreliable measure that correlates far too weakly with any real-world outcomes to be used to predict individuals’ behavior — even the test’s creators have now admitted as such.

Another factor discussed by the authors, and likely related to the stark difference in economic mobility between white and black men, was incarceration. Black men are incarcerated at much higher rates than white men. Not only does incarceration inhibit earnings potential while incarcerated, as Noah Smith points out, incarceration allows both skills and networks to atrophy, potentially leading to lower earnings. Not to mention the fact that many employers are usually less willing to hire an applicant with a criminal record.

Here again, the differences in rates of incarceration between men and women is quite stunning—particularly the difference between black men and black women. But, incarceration rates were certainly not the only factor that differed drastically between black women and black men. There were also stark differences in terms of employment rates, hours worked, and wage rank. No doubt these factors all contributed to the headline finding that the gap in economic mobility between blacks and whites is primarily a product of the difference between white and black men.

The fact that the disparity in rates of economic mobility between whites and blacks is driven by different rates of economic mobility among white and black men, with no significant difference in rates of economic mobility between white and black women, was an important finding as the authors examined possible causes of the gap. That finding (and prior literature suggesting that no racial differences in cognitive ability would vary by gender) led the authors to rule out innate differences in ability between whites and blacks as an explanation for their differing rates of economic mobility. The finding that the racial gap in economic mobility between white and black women is almost nonexistent, however, did not cause popular commentary on the study to rule out racism as a driving force behind the disparity for men. The title for The New York Times Upshot article on the findings was “Extensive Data Shows Punishing Reach of Racism for Black Boys” and the title for a follow-up post in which experts address reader questions about the study, read “‘When I See Racial Disparities, I See Racism.’ Discussing Race, Gender and Mobility.” Part of the title was taken from a section of the text in which Ibram X. Kendi, professor of History and International Relations at American University and Director of the Antiracist Research and Policy Center, responded to a reader’s question about whether the study’s data supported the claim of racism as a major factor in explaining the gap in economic mobility between white and black men.

In response to the same reader question, Upshot reporter Claire Cain Miller replied, “Our headline, and the story’s conclusion that racism plays a big role, was absolutely supported by the data.” After reiterating that the study’s authors tested many factors, and none could fully explain the gap in economic mobility between white and black boys, Miller notes that discrimination “was correlated in low-poverty areas with how well black boys fared.” Despite Miller’s assurances, there remain at least some reasonable questions about the role of family structure and more serious doubts about the validity of the implicit association tests used by the study’s authors as a factor in measuring discrimination.

While racism remains all too prevalent, it is somewhat surprising that more commentary hasn’t focused on the astonishing gaps between black boys and white boys on the very issues the authors considered most related to economic success among black men. For example, one of the most devastating findings of the report was that, although areas with low rates of poverty and a high concentration of black fathers yielded the best future outcomes for the mobility of black men (and were among the areas where the black-white mobility gap was narrowest), just 4.2 percent of black children grew up in such areas. Meanwhile, more than half, 62.5 percent of white children grew up in areas with low poverty rates and high concentrations of white fathers.

Addressing the disparities shown above should be considered a top priority for researchers and policymakers looking to boost upward economic mobility among black boys. While avoiding specific programs or policy prescriptions, the authors offer some guidance:

Our findings suggest that many widely discussed proposals may be insufficient to narrow the black-white gap in the long run. Policies focused on improving the economic outcomes of a single generation – such as cash transfer programs or minimum wage increases – can narrow the gap at a given point in time, but are less likely to have persistent effects unless they also affect intergenerational mobility. … Instead, our results suggest that efforts that cut within neighborhoods and schools and improve environments for specific racial subgroups, such as black boys, may be more effective in reducing the black-white gap.

Rather than discussing ways to improve economic mobility among black boys, some scholars preferred to address the seemingly comparatively high rate of economic mobility experienced by white men. In a blog published by the Brookings Institution, Andre M. Perry urges readers to “shift the scrutiny from the plight of black people to the privilege of white people.” However, Upshot reporter Emily Badger explains, “if we pull out and look across the whole data set, Asian-American men have higher adult incomes than white men. Hispanic men fare relatively similarly to white men. … one of the real outliers in this data was black men, not white men.”

One of the most interesting aspects of this groundbreaking study has been a strong reinforcement of the importance of growing up in a low-poverty area with a high rate of father presence. Fortunately, there are at least two bipartisan public policy options that could address these issues on the state level. First, states should enact common-sense criminal justice reforms that greatly reduce the number of people incarcerated. Replacing mandatory minimums for non-violent crimes with sentencing ranges (giving judges more flexibility), ending the suspension of driver’s licenses as a punishment, and expunging the records of youth who commit low-level, non-violent crimes are all excellent places to start and have broad public support. Second, states should follow the lead of Minnesota and ensure their public assistance requirements do not discourage marriage by immediately disqualifying couples from assistance once their incomes are combined.

In conclusion, researchers at the Equality of Opportunity Project have released another wide-ranging study that adds to our understanding of economic mobility in America, but also highlights where we’re still falling short.